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In the given case, I (as a shareholder) would be indifferent between the two options. It is so because a 100% stock dividend and 2-for-1 split will result in the same number of outstanding shares and will cause a fall in the price by the same amount. For Instance, let us that a company has a market capitalization of $100,000 and number of outstanding shares is 1,000. Stock price per share is $100 (100,000/1,000). If the company declares a stock dividend of 100%, the market cap will remain at the same level ($100,000) and the number of outstanding shares will increase to 2,000 resulting in a stock price of $50 (100,000/2,000). Similarly, if the company declares a 2-for-1 split, the total shares will increase to 2,000 (1,000*2/1) again reducing the stock price by 50%. Under this approach, the stock price after the split will be $50 (100/2). The market capitalization will again remain at the same level. It is interesting to note that a 100% stock dividend is commonly referred to as a 2-for-1 stock split.
Based on the above explanation, it can be concluded that my ownership (in terms of number of shares) will increase by the same proportion in both the cases and my wealth will continue to remain at the same level in both the options.
TFC is paying a dividend that can increase the satisfaction of the investor and will reduce the agency conflicts. The dividend payment for the company should remain same and will not increase. The company should try to increase the cash from other sources and should not decrease the dividend payments. To increase the cash positions, the company will manage the cash schedule and should not decrease the rate of dividend payment.
The rate of dividend payment of TFC should remain same as the company is generating cash flows and restriction of the payment of dividend will not hamper the cash inflow instead it will increase the trust of the investors in the company. The dividend payment will be beneficial for the company in the long run period.